In 1900, Canada raised the 3rd (Special Service) Battalion of the Royal Canadian Regiment (RCR) to replace the British garrison in Halifax. The last British garrisons of Halifax and Esquimalt were withdrawn from Canada in 1905 and 1906. The Militia Council, formed in 1904, took control of the militia from British command. A decision was taken to establish a unique Canadian military identity, reflected in distinct uniforms and a different rifle from British imperial troops.

The rise of Germany forced the British Empire to concentrate on home matters, accelerating the withdrawal of overseas garrisons. The Dominions were asked to contribute to the Empire’s defence, but Canada and Australia blocked attempts over the issue of control of troop contributions. In 1907, they did agree to participate in an Imperial General Staff system to develop common defence plans.

Rather than build costly fortifications to defend its new colony of British Columbia, the British government decided to rely on the Royal Navy. Beginning in 1858, a large naval base was built at Esquimalt. With shore facilities and a coal depot, it served the Navy's Pacific Squadron.

The superb natural harbour at Esquimalt, British Columbia, was first surveyed by the Royal Navy in 1846. In 1865, Esquimalt became the home base of the British navy's Pacific Squadron. The Royal Navy remained there until 1905.